Market Power and Spatial Competition in Rural India

IF 11.1 1区 经济学 Q1 ECONOMICS Quarterly Journal of Economics Pub Date : 2023-01-09 DOI:10.1093/qje/qjad004
Shoumitro Chatterjee
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引用次数: 5

Abstract

Abstract Market power of intermediaries contributes to the low incomes of farmers in India. I study the role of spatial competition between intermediaries in determining the prices that farmers receive in India by focusing on a law that restricts farmers to selling their goods to intermediaries in their own state. I show that the discontinuities in market power generated by the law translate into discontinuities in prices. Increasing spatial competition by one standard deviation causes prices received by farmers to increase by 6.4%. I propose and estimate a quantitative spatial model of bargaining and trade to shed light on spatial and aggregate implications. Estimates from the structural model suggest that removing the interstate trade restriction in India would increase competition between intermediaries. Thereby average farmer prices and their output would increase by at least 11% and 7%, respectively. The value of the national crop output would increase by at least 18%. However, there are distributional consequences as well, as some farmers stand to lose due to increased local production.
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印度农村的市场力量和空间竞争
中间商的市场支配力是造成印度农民收入偏低的原因之一。我研究了中介机构之间的空间竞争在决定印度农民获得的价格方面的作用,重点关注了一项限制农民向自己邦的中介机构出售商品的法律。我展示了由法律产生的市场力量的不连续性转化为价格的不连续性。空间竞争每增加一个标准差,农民获得的价格就会增加6.4%。我提出并估计了一个议价和贸易的定量空间模型,以阐明空间和总体影响。结构模型的估计表明,取消印度的州际贸易限制将增加中间商之间的竞争。因此,农民的平均价格和产量将分别增长至少11%和7%。全国农作物产值将至少增加18%。然而,也有分配方面的后果,因为一些农民会因为当地产量的增加而蒙受损失。
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来源期刊
CiteScore
24.20
自引率
2.20%
发文量
42
期刊介绍: The Quarterly Journal of Economics stands as the oldest professional journal of economics in the English language. Published under the editorial guidance of Harvard University's Department of Economics, it comprehensively covers all aspects of the field. Esteemed by professional and academic economists as well as students worldwide, QJE holds unparalleled value in the economic discourse.
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